The following income tax amendment orders were gazetted on 6 August 2024: 

Both the above-referred amendment orders are deemed to have come into effect retrospectively from 1 January 2023.
 
Income Tax (Exemption) (No. 4) Order 2023 (Amendment) Order 2024
 
The Income Tax (Exemption) (No. 4) Order 2023 (Amendment) Order 2024 has amended paragraph 5(2) of the Income Tax (Exemption) (No. 4) Order 2023³ to provide BioNexus companies with additional time to apply for income tax exemptions. Through the amendment, the deadline for an application for exemption made in writing by a BioNexus company has to be received by the Minister of Finance through the Malaysian Bioeconomy Development Corporation Sdn Bhd on or after 1 January 2019 but not later than 31 December 2024. With this extension of time, BioNexus status companies will have more time to meet the requirements and benefit from the exemptions provided under the Order.
 
In addition to the above, the amount of statutory income exempted from the payment of income tax in the basis period for a year of assessment derived from the qualifying activity, which was originally limited to seventy per cent of the statutory income in the exempt years of assessment under paragraph 7(3) of the Income Tax (Exemption) (No. 4) Order 2023 has been removed. This means that the full amount of statutory income for a qualifying BioNexus status company will be exempted from income tax.
 
Income Tax (Exemption) (No. 5) Order 2023 (Amendment) Order 2024
 
Similarly, the Income Tax (Exemption) (No. 5) Order 2023 (Amendment) Order 2024 has amended the Income Tax (Exemption) (No. 5) Order 2023⁴ by extending the time frame for an application for exemption under paragraph 5(2)(a) to be made in writing by a Bionexus status company and received by the Minister of Finance through the Malaysian Bioeconomy Development Corporation Sdn Bhd on or after 1 January 2019 but no later than 31 December 2024.
 
Comments
 
These amendments reflect the Government’s ongoing support for the biotechnology sector by providing BioNexus companies with extended opportunities to benefit from tax exemptions. The extension of deadlines until 31 December 2024 is particularly significant for companies that may have faced delays in meeting the original deadlines.
 
The removal of the seventy per cent cap on exempt statutory income under the Income Tax (Exemption) (No. 4) Order 2023 retrospectively from 1 January 2023 will be welcomed by qualifying BioNexus status companies.
 
Our previous alert on the Income Tax Exemption Orders for Bionexus companies can be accessed here.
 
Alert by Victoria Low (Associate) of the Tax Practice of Skrine.
 

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